Wednesday, June 6, 2012

Heat Roadmap Europe 2050

A new report by researchers at Aalborg and Halmstad Universities produced for the Euro Heat and Power Association entitled Heat Roadmap Europe 2050 (available at http://tinyurl.com/br8ow8x) claims that policymakers should explore the full capacity of District Heating systems and additional industrial heat use from industrial Combined Heating and Power (CHP) plants, as well as other linked approaches. Yet, the low geographical resolution of traditional energy modelling based on national energy balances, tends to exclude specific local possibilities. [Therefore]..., traditional models favor generic possibilities available everywhere, such as electric and gas alternatives associated [with]... major international energy companies. As a result, efficient and renewable heating and cooling options are not sufficiently taken into account in energy scenarios such as the EU Energy Roadmap 2050.

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The study shows that more district heating in Europe will reduce the energy system costs considerably since local heat recycling and renewable energy use will reduce expensive energy imports, while also increasing the efficiency of both the electricity and heat sectors. The calculations indicate that the overall annual cost reduction in the heating sector will be about €14 billion by 2050, if more District Heating is implemented compared to the Energy Roadmap 2050 CPI reference (assuming the same fuel prices). This corresponds to a relative cost decrease of 11%, not taking into account the additional balance-of-payment benefit. The job-creation effect could amount to as much as 8-9 million man-years created in Europe during the 40 year period, due to investments in heat recycling, renewable energy supply, and extended and new heat grids.

With a high proportion of variable renewable electricity supply, a smart energy system is crucial. The study indicates that District Heating systems are proven flexible partners which can provide balancing power in both directions. For example, electric boilers and large heat pumps together with thermal storages can absorb critical excess electricity generation, while combined heat and power plants can actively support the electricity supply system during power deficits. Therefore, District Heating can enable higher penetrations of intermittent electricity production on the European electricity grid.

The major purposes of the pre-study were: Validation of the proposed research methodology; indication of possible results from a future full research study; early warning information to policy-makers about the quality of official EU energy roadmaps with respect to the expansion of district heating systems; and giving an alternative future projection to many all-electric future heat scenarios.

The value of energy wasted each year in the European Union amounts to a whopping € 1.0001 per citizen. Euroheat & Power highlights that this figure represents a huge economic loss that could be significantly reduced through increased use of District Heating and/or District Cooling.

Heat is the most needed form of energy used by EU citizens. According to the International Energy Agency, 37% of the services we receive from energy providers are for heat, compared with only 21% for electricity. This confirms that heat is the dominant demand. At the same time, an analysis of the European energy balance undertaken in the study Ecoheat4EU3 shows that more than half of the primary energy available to Europe is today lost as waste heat. At current oil prices, the value of this amount of energy is equal to roughly 500 billion EUR or € 1.000 per citizen.

Hence, the most energy efficient way to meet the demand for heat is to use heat that would otherwise be wasted, and which will be produced regardless of whether or not it is recycled. Most of this “waste heat” comes from power plants and industrial facilities. District Heating and Cooling is the proven way to ensure that waste heat is recycled to provide comfort and domestic warm water to buildings, or even to cover certain industrial heat demands - thereby not only preventing unnecessary and unsustainable waste but also reducing the need for fossil fuels.

A leading example on how saving heat recycling in District Heating and Cooling can contribute to a healthy economy and stable energy bills is Denmark who is currently holding the Presidency of the European Union.
“The true picture of the European energy supply is that we waste an appalling share of the energy which we have at our disposal. Looking to the targets for 2020 and 2050, at our growing dependency from foreign supplies and the economic difficulties that come along with rising energy prices, it is difficult to understand how the EU could afford to continue wasting valuable energy and resources” says Birger Lauersen, International Affairs Manager at the Danish District Heating Association and President of Euroheat & Power. “Supporting District Heating is the most effective step that EU Member States can take towards attaining a higher level of energy efficiency. If we expand the use of District Heating and Cooling we can recycle a high share of the 53% of primary energy that we waste each day.”

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Heat deliveries are presumed to grow by a factor of 2.1 until 2030 and by a factor of 3.3 until 2050.

Currently, 60 million EU citizens are served by district heating systems in their daily life. But the existing district heating systems supply only part of the heat demands in the cities they serve. Cities with at least one system have a total population of 140 million inhabitants and approximately 57% of the EU population lives in regions that have at least one district heating system. Hence, more district heat can be delivered in the future by expanding existing district heating systems.

Only less than half of the calorific value of waste incinerated in 414 waste-to-energy plants is recovered as electricity or heat. This gives a driving force for increasing the heat recycling from the existing plants. Further waste-to-energy plants can be implemented, as almost 100 million tonnes of non-recycled waste is deposited on landfills.

One quarter of the European population lives in urban areas that can be reached by geothermal heat through future district heating systems. This includes major cities such as Hamburg, Berlin, Munich, Frankfurt am Main, Hanover, Stuttgart, Aalborg, Groningen, Amsterdam, Rotterdam, Paris, Lyon, Strasbourg, Barcelona, Budapest, and Bratislava.

[According to EU27 from the IEA] district heating accounts for approximately 12% of the total residential and services heat demand in 2009. This 2010 historical reference is modelled on an hour-by hour basis in this pre-study using the energy system analysis tool EnergyPLAN. Using the EnergyPLAN tool, a first draft evaluation of expanding district heating in Europe is carried out in this Heat Roadmap Europe (HRE) pre-study, from the present 12% to first 30% and afterwards to 50% of the heating of buildings. The benefits are illustrated in two steps. Step 1 shows the potential energy efficiency improvements connected to CHP while step 2 shows the additional potential of increasing the use of industrial waste heat, waste incineration, geothermal and solar thermal resources. Both steps are calculated for the present European energy system for the year 2010 as well as for a scenario representing the implementation of current EU27 energy policy until 2050.

According to the IEA EU27 energy balance for 2009, which was used to profile the heating sector in 2010, the 38% (50% minus 12%) of heating for buildings in question is today heated by electric heating or individual boilers burning coal, oil, natural gas or biomass. In step1 these buildings are converted to district heating using the following assumptions:

Coal, oil and natural gas boilers are replaced accordingly, while no replacement of biomass boilers are assumed....

Moreover to simplify the calculations in the pre-study, no electric heating has been replaced, although that can prove to be an important part of the district heating expansion.

The production of district heating will come partly from existing power and CHP plants assuming an average efficiency in the present situation of 32% electric and 52% thermal output and partly from new Combined Cycle (CC) CHP plants with an efficiency of 47% electric and 44% thermal output. The CC plants will burn natural gas equivalent to the oil and gas saved in the individual boilers being replaced.

The share of peak load boilers in all systems is assumed to be on the same level as the existing average of approximately 9-13%. In the case of 50% district heating this means that a small share of large-scale heat pumps in district heating areas will have to be added in order to be able to balance the electricity supply....

The expansion of district heating and CHP will decrease the fuel consumption for heating buildings in Europe substantially. Today 12% of heat is supplied by district heating which consumes a little less than 250 TWh/year of fuel, while the remaining individual boilers consume around 3100 TWh/year. The total of approximately 3350 TWh/year will decrease by 40% to around 2000 TWh/year if a 50% district 2000 TWh/year if a 50% district heating share is reached. The fuel used by the boilers to be replaced by district heating if expanded replaced by district heating if expanded to 50%, is today approximately 1550 TWh/year of coal, oil, and natural gas. In a system with district heating and CHP the fuel consumed by the total energy system will decrease by 1300 system will decrease by 1300 TWh/year, meaning that the same heating can be provided with a net use of only 250 TWh/year of fuel. The net use of 250 TWh/year requires the following changes to the system: Fuel for CHP is increased in existing systems by 1360 TWh/year and in new CC-CHP systems by 1560 TWh/year while the electricity from the CHP plants replaces 2670 TWh/year of production from the condensing power plants. In the power and CHP plants, the burning of natural gas is increased by net 1460 TWh/year equivalent to the oil and gas saved in the individual boilers while the net influence on the use of coal is a decrease of 1210 TWh/year.

The expansion of district heating will decrease the European primary energy consumption by 7%, fossil fuels by 9%, and the carbon dioxide emissions by 13% while still supplying the exact same energy services. Again it should be noted that the potential for fuel savings is most likely higher than calculated in this pre-study, since there are additional alternatives which could also be implemented. For example, there is also a substantial amount of electric heating in the EU27 energy system which can be converted.

Step 2 illustrates further benefits of district heating by implementing the following investments:

Increase waste incineration from now 105 to 1198 TWh/year in 2050

Increasing the use of geothermal heat from now approximately 2 to 111 TWh/year in 2050

Increase the use of solar thermal heat from now 0.04 to 55.5 TWh/year in 2050

Increase the use of industrial excess heat from 53 to 219 TWh/year in 2050

Since these investments represent the replacement of fuels rather than efficiency improvements,such benefits will only slightly decrease the primary energy consumption further. However the share of fossil fuels as well as the carbon dioxide emissions will be reduced substantially. If both step 1 and 2 are implemented, then the total fossil fuels in Europe are reduced by 13% and the carbon dioxide emissions by 17%

Additional to the above estimation of district heating benefits in the present 2010 EU27 system, the analyses has also been carried out for a reference scenario representing the implementation of current EU27 energy policy until 2050: this is based on the Current Policy Initiatives (EU CPI) scenario in the “Energy Roadmap 2050” report. This scenario represents a business-as-usual forecast for the EU27 energy system if existing policies are followed. Some interesting trends included in the EU CPI scenario are the following:

Nuclear power is gradually reduced during the period to 2030, but subsequently begins to increase back to 2010 levels in 2050 once again.

Existing CHP and Power plants are being replaced with new plants over the years resulting in a gradual increase in the average efficiencies of the European power sector.

The specific heating demand for buildings is decreased due to energy conservation improvements in the buildings, but the heat demand in industry increases substantially.

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This pre-study also includes a rough estimate of costs which indicate that, assuming the same fuel prices as forecasted in the Energy Roadmap 2050 report, the implementation of the district heating expansion scenario will decrease the total costs of heating buildings in Europe by approximately €14 billion/year in 2050. Even more importantly, implementing the district heating alternative will transfer money from importing fossil fuels to investments in district heating pipelines, CHP plants, geothermal, solar thermal, industrial waste heat, and waste incineration. Thus a substantial number of jobs will be created in the investment phase. This pre-study only includes a first rough estimate of job creation which is around 8-9 million man years: this equates to approximately 220,000 new jobs on average over the 38 year period from 2013 to 2050. It must however be emphasized that 220,000 jobs is a rough estimate of the minimum number of work places being created and the 220,000 jobs solely arise from the additional investments. The real number will be higher because:

Multiplier effects of the jobs created are not included.

Additional jobs are not included to account for the fact that when the energy costs of Europe decrease, European industry will become more competitive.

Additional jobs from industrial innovation due to the investments in new energy technologies are not included.

The major findings from this Heat Roadmap Europe pre-study exploring the future district heating possibilities can be summarised by the following eight conclusions:

The first conclusion is that more district heating in Europe will reduce the energy system costs considerably since local heat recycling and renewable energy use will reduce expensive energy imports, while also increasing the efficiency of both the electricity and heat sectors. The pre-study calculations indicate that the overall annual cost reduction in the heating sector will be about €14 billion by 2050, if more district heating is

implemented compared to the Energy Roadmap 2050 CPI reference. This corresponds to a relative cost decrease of 11%. At the current energy import prices, the direct socioeconomic payback is estimated to be two to three years for heat distribution pipes put into the ground giving more recycled heat. In addition, there is a balance-of-payment benefit that has not been quantified in this study.

The second conclusion follows from the first conclusion: Since fossil fuels are substituted with local resources, the reduced primary energy supply from fossil fuels will also give considerably reduced emissions of carbon dioxide for all heat demands served by district heating systems. The reduced energy import will also increase the future security of supply and give more positive balances of foreign exchange.

The third conclusion is that more district heating will generate local labour since intensive investments will replace expensive imports of fossil fuels to Europe. An estimate indicates that approximately 8-9 million man-years will be created in Europe during the 40 year period, due to investments in heat recycling, renewable energy supply, and extended and new heat grids. This represents a rough estimate of the minimum number of jobs and should be quantified more thoroughly in the future.

The fourth conclusion concerns the future European electricity supply system. With a high proportion of variable renewable electricity supply, a smart energy system is crucial so that all sectors can contribute to a balance between supply and demand. One of the proven flexible partners is district heating systems which can provide balancing power in both directions. For example, electric boilers and large heat pumps together with thermal storages can absorb critical excess electricity generation, while combined heat and power plants can actively support the electricity supply system during power deficits. Therefore, district heating can enable higher penetrations of intermittent electricity production on the European electricity grid.

The fifth conclusion is about the importance of communicating the local possibilities for district heating to urban and regional planners. The planned continuation of this pre-study should contain a creation of an interactive internet tool providing the local conditions for district heating for each administrative region in the EU27.

The sixth conclusion is about the methodology applied in this pre-study, which is a combination of energy modelling and mapping of the local conditions using a high geographical resolution: The high resolution also recognises future possibilities for local activities managed by local organisations. This methodology is crucial for district heating analysis since the potential for expansion is dependent on local heat resources and demands. Therefore, this methodology should be elaborated in the planned continuation of this pre-study, while also making a tighter connection between the energy modelling part and the local mapping part.

The seventh conclusion concerns traditional energy modelling based on national energy balances. Their low geographical resolution tends to exclude specific local possibilities. Hereby, they favour generic possibilities available everywhere such as electric and gas alternatives associated to major international energy companies. Hence, these traditional energy tools may only capture some of the alternatives available. Traditional energy tools also tend to work with a low time resolution in their analyses. However, it is important to use a high time resolution to capture the daily variations in the energy system in order to verify the true variability in energy demand and supply, especially in a future energy system with high penetrations of intermittent resources.

The eighth and final conclusion refers to the availability of data within the current IEA and future Energy Roadmap 2050 reports. At present, there is a lack of detailed data for the heat sector in these energy balances. For example, all fuels consumed by CHP plants are recorded together and not subdivided by condensing mode, extraction mode, and backpressure mode. In the future, it would be beneficial if the details within these energy balances could be increased for the heat sector. In line with this, we would like to thank the European Commission for providing all of the data possible during the limited timeframe of this study

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